Free Money Finance had a "Help A Reader" post the other day with an email from a woman asking if folks thought it was a good idea to take money out of her mutual funds to pay off $24K in credit card debt.
The broad consensus from commenters on the post was yes, cash out the mutual funds and pay off the cards, 
provided those funds are not inside an IRA or something similar. Okay, fine.
A few commenters obliquely approached the core craziness here by asking if the reader would have borrowed money on her credit cards to invest in the mutual funds. Of course that sounds like a really loopy idea, and of course that is what she (effectively) did.
Not paying off a credit card or other high-interest consumer debt so you can save or invest is, or at least should be, an intuitively bad move. The returns on the investments are unlikely even to approach the cost of borrowing the money.
Read more »
As most of you know, 2010 is a special year for taxes. It is the last year covered by the Bush tax cuts which, as you may remember, were engineered as a package of temporary adjustments and deals rather than permanent 
changes. Most of it goes poof on December 31st of this year.
In the meantime, 2010 is a special year for converting traditional IRAs into Roths. When the Bush cuts were being constructed there was a need to find more government revenue, particularly at the end of the period covered by the law, i.e. 2010. IRA conversions fit the bill because, in the short run, they generate additional income tax revenue. (In the long run they do not, since conversions reduce income taxes paid in the future.)
So as of a few days ago, the income limitation on conversion to a Roth is gone. And just to get things started with a bang, for 2010 only, you have the option to defer the income tax bill on the conversion to 2011 and 2012. (That is, it is split between those two tax years.)
Read more »
Back on the web now. My apologies to everybody who missed me. Living without broadband for two days was quite an experience. It would make a good reality show, maybe for PBS: 1980s House.
Speaking of being wired up and of decades past, when I sat down to catch 
up on what I had missed I came across a wonderful item. The U.S. Consumer Product Safety Commission announced the voluntary recall of nine books on home improvement. Printed in China with lead-based ink? Not exactly.
The books contain errors in the technical diagrams and wiring instructions that could lead consumers to incorrectly install or repair electrical wiring, posing an electrical shock or fire hazard to consumers.
Several aspects of this story amuse and/or fascinate me. And there are implications for that other great and dangerous DIY area, personal finance.
Read more »
The Internet connection at the Curmudgeon household is down, and I am way too old to blog from Starbucks. Please stay tuned.
I like television. I don’t love it. Outside of baseball season I’m not a daily watcher. But it’s a nice thing to have in the house. I even think of it as a relatively cheap form of entertainment.
Much cheaper, for example, than its closest analogue, going to the movies.
Apparently, I was wrong. Turns out, each hour of TV watched costs me $4 in increased spending. This from Juliet Schor, currently a Boston College sociologist:
"Television viewing results in an upscaling of desire. And that in turn leads people to buy." Her study found that every additional hour of TV viewing per week boosts spending by roughly $200 a year.
(This from Money Magazine at CNNMoney.com via Consciously Frugal via Fiscal Fizzle via ABDPBT. The opportunity to run a fourth generation link was not the only reason I picked this topic, BTW.)
Read more »
provided those funds are not inside an IRA or something similar. Okay, fine.
Credit Cards, Gurus, PF Blogs | Frank Curmudgeon | 
January 13, 2010 12:59 pm | 
Comments (698) 
Subscribe